A law office has two partners, and a new associate who is in his late 30s. Three NHCE staff are in their 20s and 60s. The new associate, who is a go-getter, got a lousy Profit Sharing contribution for 2017, and was unable to benefit in the Cash Balance Plan. He's unhappy about it, which makes the partners unhappy. In terms of plan design, could we:

• Exclude the new associate from the CB plan (he isn't benefiting anyway).
• Amend the DC plan to exclude the partners, and change from a cross tested allocation to a design based safe harbor, such as an integrated allocation, so that the young associate can get a larger allocation in the DC plan.

If we were to do this, must we still combine the plans for 401(a)(4), or is the DC free from that requirement because it isn't subject to 401(a)(4), and the other HCEs aren't benefiting in that plan? In other words, there is no crossover between the two plans where HCEs are concerned, so does this give us some wiggle room for the young associate? By the way, the associate does not meet the definition of Key Employee.

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A participant has requested a hardship withdrawal to pay medical bills. They have old medical bills that are in collections at this time, and the date of service was back in 2015 and 2016. They even have a couple from the end of 2017, but nothing in the past 6 months. Is there a time limit on the medical bills, or is there a point in time where it changes from medical expenses to debt? What are the thoughts on approving this hardship?

I am doing research on correcting excess deferrals for 457(b) plans. If we discover the excess deferral prior to the April 15th deadline and distribute accordingly, what is the corrective action? Does the employer need to issue a new W-2? Any other forms needed?

ESOP documents generally seem to provide a 5-year distribution period for funds attributable to company stock, though longer for very large distributions. Some seem to require a 5-year break in service prior to beginning of payout. Is the purpose of this to protect/cushion the employer/plan from big swings in stock prices -- so there isn't a major cash flow problem due to a high payout, or is it due to other considerations? I assume that if a sponsor were to choose to provide for immediate lump-sum, it could do that, even if it would be potentially unwise/risky.

recently I was looking something up on the internet and the following appeared but clicking on those links did nothing. King Dave Baker indicated the following (after a big ARRRGGHHH) I am finding that I can reach the intended target pages by doing some manual fiddling -- e.g. the first link below has a "t=4889" which means this link will work instead: https://benefitslink.com/boards/index.php?showtopic=4889

I have a client that has a 401(k) plan recordkept by us and a DB plan recordkept by another firm. Most employees are eligible for both. The compensation definition for all aspects of the 401(k) plan excludes commissions. The employer has a few employees who earn commission only. My general understanding is that if an employee has no eligible compensation for a plan, then they are excluded from the testing. Further my understanding is that only folks who are benefiting from a particular money source are included in the 414(s) compensation ratio testing. Therefore, in this case, if one of my commission-only participants has only $100k in commissions, they would not be included in the 401(k) plan's testing (e.g. ADP/ACP, 401(a)(4)) because they are not benefiting. Then, if they are not benefiting, they should not be included in the 414(s) compensation ratio testing. Is that correct? Part II -- If they have a separate division that is included in the DB but excluded from the definition of eligible employee for the 401(k) plan, then they should be obviously be included in the coverage testing for the 401(k), but not in the benefiting group and consequently not included in the 414(s) compensation ratio testing for the 401(k) portion. Does that sound correct as well?

We have a plan that had an AFTAP of 76% for 2017, but we recently completed the calendar 2018 plan year actuarial valuation on June 11, 2018 and find that the AFTAP is now over 80%. A participant making a claim for their benefit elected not to defer the election due to the prior restriction and decided to take the 50% lump sum and monthly payment for the balance. The plan has a lump sum option and purchases annuities for monthly benefits. The benefit commencement date for this would be 6/1/18. In this situation our procedure is to pay the lump sum portion, and pay the monthly benefit portion from the plan. If/when plan comes out of restrictions, an annuity would be purchased for the benefit being paid from the plan. The benefit is about to be processed, but has not yet been paid. Would it be reasonable or even legal, to contact the employer (who is in the very early stages of terminating the plan), explain the situation and ask if we could contact the participant to ask again if they'd like to withdraw their current election so they could receive full lump sum?

How do in-kind distributions work if the plan is invested in a group annuity? I'm assuming the in-kind distribution rules don't apply to insurance products.

Cash balance plan has a formula that's something like 10% x YOP for HCEs, .5% for NHCES. Life insurance is 100x projected benefit. Plan specifies particular employee names for eligibility. It covers 40% and is amended to add names when needed. It's tested on aggregated basis with a PS/K that presumably covers everybody. What are the issues? BRF for the life insurance? Anything else?

Anyone else find this alarming? What if I'm a small plan sponsor and I've done my own lost earnings calculation and deposited it into the participant accounts. I've done an amount-involved calculation and have filed and paid an excise tax with Form 5330. And yet (it appears) the DOL is going to come after me for not filing a VFCP as well?

ARA article: https://www.napa-net.org/news/technical-competence/regulatory-agencies/ebsa-threats-of-alternative-enforcement-actions-trigger-ara-response/

Letter from the DOL (see the last paragraph in particular): https://www.napa-net.org/wp-content/uploads/letter-from-DOL-4.27.2018-002.pdf

ARA letter to DOL: https://www.napa-net.org/wp-content/uploads/18.06.07DOLEnforcementFinal.pdf

CPA firm auditing a pension plan of 500 participants has found the goose who lays the golden egg - one participant's data was used in place of another, and they have determined this to be 'major' and necessary to include in their report, even though the effect on the valuation was about 0.75%. We have identified that a staff editing the data made an inadvertent data error. May I throw out there if anyone has provided an acceptable reason to the cpa's for such data errors?

Hi to all and Happy Father's Day weekend to all the Dads! We have a prospect who has a work force of non-owner, non-HCE employees. In the profit sharing component of their potential 401(k) plan, they would like to favor a manager with a higher contribution than the other employees. Our thinking at least initially is that since there are no HCEs and no Keys, they should be free to do this. What are we forgetting to take into consideration? We are so accustomed to thinking in terms of plans that have both HCEs and Keys as well as non-HCEs and non-Keys that we don't remember if there is anything to conform to when this is not the case. There must be something - otherwise they might give the favored employee a contribution and nothing to those they don't like..... Any thoughts will be appreciated!